Governor Kate Brown released the following statement Tuesday after meetings with Democrat and Republican legislative leadership regarding plans to call for a special session to adapt Oregon’s pass-through law to include the smallest businesses, sole proprietorships, in the tax break afforded larger businesses:
“We have an obvious inequity in Oregon’s tax system that is prejudiced against thousands of small Oregon businesses, and a simple change can fix it. I’m simply not willing to let these main street businesses — entrepreneurs, mom and pops, and start-ups — go through another tax year with unfair tax treatment as compared to their larger competitors.
“An estimated 9,000 sole proprietorships could qualify and use this new opportunity to reinvest more of their profits into their businesses and employees. And with this new economic incentive many more could take advantage of the same tax break that larger businesses already enjoy. We’ve already seen the number of large companies that qualify increase since the pass-through law was first created just five years ago. Nine thousand may seem like a small number to some in Salem, but to these business owners and their employees, it makes a big difference.
“I’m calling for a special session on May 21 to make this change to keep our small businesses growing. Legislative days are already scheduled for this week so it will work for most legislators’ schedules and will keep additional costs to the state to an absolute minimum.
“It is important to do this now for our smallest businesses — waiting any longer will only cost the businesses themselves more money. If we want these thousands of businesses to qualify for this economic incentive for the 2018 tax year, this has to be done now and cannot wait. Administratively, any tax bill passed in the 2019 regular session would not take effect until October 2019 — long after 2018 taxes are filed.
“It is universally acknowledged that these small businesses are treated unfairly as compared to their competitors in Oregon’s tax system. Because of this I look forward to working with the Legislature to get this addressed now, for the 2018 tax year."
Oregon Senate President Peter Courtney released a statement:
“The Governor has called us in. The Senate will convene to consider her proposal. We will organize May 21 and run the session simultaneously with Legislative Days.
“Special sessions present unique challenges. They require focus. They require discipline. The Speaker and I plan to appoint a joint committee which will begin hearing the bill before the session to allow for as much public input as possible.”
Republican Senator Jackie Winters released the following statement following the announcement from Governor Kate Brown regarding her plans to call a Special Session:
"This so-called 'emergency' was caused by the Governor and the majority party. Their actions during the 2018 session to take away a small business tax cut is the reason we are now being called in to Special Session. While the Governor's proposed fix doesn't help nearly enough Oregon small businesses, we are committed to working to expand these tax cuts so that all small businesses in Oregon receive tax equity and fairness, just as they would have had the Governor vetoed Senate Bill 1528."